Transnistrian Economic Review, 4th quarter 2014 (#4)

The Q4-2014 issue of the Transnistrian Economic Review points an increase of the convergence index between the Moldovan and Transnistrian economies. Currently at 93.9%, the index recovered 0.4 percentage points over the second quarter, which means the region’s economy closed the gap to Moldova’s economy. However, this trend has occurred due to a recovery growth of the metallurgical, energy and agricultural sectors, the latter one being caused by favourable weather conditions.

At the same time, Transnistria’s legislative body voted the 2015 budget law draft, which includes a 40% budget deficit from the public expenditures. This enormous deficit is a constant problem for the region, being amplified by the worsening economic conditions. Bottom line, there is a vicious cycle: the chronic budget deficit deteriorates growth which subsequently causes economic turmoil leading to impoverished public finances.

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